Note: Late for an Appointment: Balancing Impartiality and Accountability in the IRS Office of Appeals

Abstract: “The Internal Revenue Service (“IRS”) Office of Appeals employs a cadre of individuals to preside over “collection due process” hearings. These hearings are meant to avoid litigation in the United States Tax Court by resolving disputes internally. “CDP officers” exercise significant authority and discretion over taxpayers’ cases, and in light of the Supreme Court’s decision in Lucia v. SEC, it appears they are “Officers of the United States.” Because IRS procedures impose significant constraints on their discretion, they are likely “inferior”—rather than “principal”— officers. CDP officers are not currently appointed consistent with the Appointments Clause of the Constitution. And even if they were, courts may need to decide whether their membership in the civil service, with its attendant protections from removal, presents a constitutional problem under the Supreme Court’s removal power jurisprudence.

This Note presents a solution that is part-formalist and part-functionalist. First, Congress should pass legislation requiring that the Secretary of the Treasury—undeniably a “Head of Department”—appoint CDP officers. This would be a clean constitutional fix causing only minimal disruption to current practice. Second, courts should uphold CDP officers’ civil service protections. Deciding the constitutionality of removal protections requires a close examination of the officer’s role and functions; because CDP officers are meant to be neutral, third-party adjudicators, the Constitution allows more insulation in their case than it might for a politically unaccountable policymaker.”